Crypto is a Fourth Quarter Team (Core Strategy Rebalance)

ETHTFs Coming to a Brokerage Account Near You

Thursday marked a broad-based rebound in equities and crypto, with a modest bounce in the bond market tagging along. This crypto rally received an extra push from some noteworthy developments. Our flash insight on Thursday morning highlighted Bloomberg’s Eric Balchunas' commentary, suggesting a high likelihood that the SEC would greenlight ETH futures ETFs this week due to the imminent government shutdown, which could also impact the BTC spot ETF landscape.

Later in the day, VanEck unveiled plans for its upcoming Ethereum Strategy ETF (EFUT). Around the same time, asset manager Valkyrie announced the purchase of ETH futures contracts, following approval to convert its existing Bitcoin futures ETF into a dual-investment vehicle. To us, this sets the stage for ETH futures products to become accessible through major brokerage accounts come Monday.

ETH saw solid performance, but ETHE, the Ethereum Grayscale Trust, which opened the day at a 34% discount to NAV compared to GBTC's 23% discount, doubled spot price performance. With the introduction of ETH futures products, we expect this discount gap to narrow, possibly unlocking a 17% gain for ETHE, in addition to any price appreciation in the underlying.